Multitier pricing is the major obstacle standing in the way of better relations between pharmaceutical manufacturers and supermarket pharmacists, according to a survey of supermarket pharmacy directors.
Pharmacy executives responding to the survey, conducted jointly by Supermarket Pharmacy and Marketing Corporation of America, Westport, Conn., overwhelmingly (92%) observed that supermarket pharmacies are not treated fairly in terms of pricing when compared with other classes of trade, such as health maintenance organizations and mail-order pharmacies.
The average supermarket company in the survey operated 137 stores, of which 53 contained pharmacies. Respondents reported that, on average, pharmacy represented 4.3% of store sales. A total of 276 survey forms were sent to top supermarket chains, with 49 returned, for an 18% response rate.
Presented here is part one of the survey results, dealing with relations between pharmaceutical manufacturers and supermarket pharmacies. Part two, to be published in an upcoming issue of Supermarket Pharmacy, will detail findings on how supermarket pharmacy services are marketed and merchandised.
Supermarket pharmacy directors were nearly unanimous (96%) in favor of one price for pharmaceuticals, except for discounts based strictly on volume. The subject of multitier pricing, or "discriminatory pricing," the term used by pharmacy retailers, also attracted by far the greatest number of penciled-in responses, including: "Hospital pharmacies and mail-order sell below our cost of goods"; "Contracts [for HMOs and mail-order pharmacies] are bid, and at much cheaper prices than we can purchase, and thus the playing field needs to be leveled," and simply, "We pay way too much."
More than two out of three pharmacy executives (69%) agreed, however, that supermarket pharmacies are treated fairly in terms of pricing when compared with other pharmacy retailers.
The remaining 31% disagreed. Some dissenting comments included: "Large chains like Wal-Mart have too big of a price advantage" and "Size of operation determines importance."
Overall, more than half (58%) of pharmacy executives agreed with the statement, "The attention we receive from manufacturers is about right." However, more than a third (38%) said manufacturer "sales reps pay more attention to the major drug chains than they do supermarkets with pharmacies." The remaining 4% said they are "inundated with sales reps and information from manufacturers."
Asked how relationships with pharmaceutical manufacturers could be improved, nearly half (44%) said they would like brand-name manufacturers to supply more information about their drugs' cost effectiveness. Another 31% said manufacturer sales reps should call on pharmacists as well as physicians. One in four executives suggested that manufacturers supply more information about the therapeutic benefits and adverse effects of products.
Other suggestions offered by pharmacists to manufacturers looking to improve relations included calls for manufacturers to pay pharmacists incentives for increasing a brand's market share, along with "decrease unnecessary sampling" and "get payment approval [for brand-name products] from third-party plans." When asked to indicate how brand-name companies could increase brand-name dispensing in supermarket pharmacies, the response "lower prices" topped the list, garnering 93.5% of first- and second-place rankings.
Other responses by pharmacists, in order of importance, were: promote more to pharmacies; promote more to consumers; sponsor continuing education types of programs for pharmacists on the product category, and provide pharmacies with more patient education materials.
Looking at the future of this relationship, pharmacy directors were optimistic. More than a third (38%) see the relationship between pharmaceutical manufacturers and supermarket pharmacies improving over the next few years. Another 44% expect it to stay the same. Only 19% see matters deteriorating during the same period.
Access to Fair Prices
Supermarket pharmacy directors do not think they are treated fairly by pharmaceutical manufacturers in terms of pricing when compared with HMOs and mail-order pharmacies.
VERSUS HMOS AND MAIL ORDER
Treated Fairly Yes 8% No 92%
Supermarket pharmacy directors, howver, generally do think they are treated fairly by pharmaceutical manufacturers when compared with other pharmacy retailers.
VERSUS OTHER PHARMACY RETAILERS
Treated Fairly Yes 69% No 31%
Attention From Manufacturers
Most supermarket pharmacy directors think they receive enough attention from pharmaceutical manufacturers, although a sizable minority disagree.
